Dwindling Options for Counties

April 11, 1991

The closing bell of the just-ended General Assembly session should send an unmistakable message to suburban county executives: You're on your own. "They all wanted bailouts, but there just wasn't the money this year," said state Del. Robert H. Kittleman, R-Howard. "You can't make it appear like magic." And they didn't. With the exception of waiving school-funding mandates and modest increases in state aid, counties came away with precious little.

Maryland legislators had no stomach and perhaps less political motivation for raising major state taxes or giving local governments new taxing power to help offset shortfalls. This means that the counties, most of which are struggling to make up for severe drop-offs in real-estate revenue and income-tax receipts, have few options left. In the end, it boils down to a choice between a hike in property taxes -- the only local tax source worth talking about -- or imposing service cuts.

This has been the choice all along. Proposals to increase Montgomery's piggyback income tax or plans to tax telephone calls in Prince George's and hotel stays in Howard never had a chance in the State House. Some legislators felt, with justification, that local governments were relying too heavily on the state to solve their financial problems. The killing blow to Montgomery's plan to raise its piggyback income tax, for example, was the county council's reluctance to override a limit on local property taxes enacted last fall.

Montgomery's elected officials may yet come to regret this decision. The county's huge deficit could lead to draconian cuts in education, previously a sacrosanct category. Other county executives, mindful of the anti-tax sentiment of the last election, are equally hesitant to raise property taxes. To balance their books, they may be forced to impose sharp reductions in government services.

The political reluctance to increase property taxes is understandable, but short-sighted. Only by using this revenue source in tandem with sensible steps to trim operating expenses can local governments balance their budgets without causing undue pain to those who depend on county governments for help and survival.